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The report focuses on studying and understanding the key aspects of the module-Organisational Behaviour. Although this module, within itself, is such a vast topic that it is in fact a subject in its own. However, for the purpose of my assignment, I have chosen Apple Incorporated as the company and have done a detailed research on its policies, its leadership strategies etc. The first part of the report describes about the company and its performance during past few years. In the later parts of the report, 3 broad aspects of Organisational Behaviour have been taken i.e. Leadership, Motivation, and Change Management. Each of these aspects have been explained and have been co related with Apple in order to find out whether the company is following a good strategy or there is a scope of improvement or if it requires a complete change. The focus throughout the project has more or less revolved around the CEO of Apple, Steve Jobs, and the way he manages and motivates the employees in the organisation. Finally, based on the complete report, there is a brief conclusion at the end of the report.
Corporate Profile of Apple Inc. (Source: www.apple.com)
Established in 1976, this American born multinational corporation was started by Steve Jobs, Steve Wozniak, and Ronald Wayne. At the time of its Incorporation, Wayne sold his share and the company was left in the hands of Jobs and Wozniak.
Over a period of 30 years, Apple Company has not only changed its name from Apple computer Inc. to Apple Inc., but it has also expanded its product range from computers to a wide range of consumer electronics.
The company's offerings to its widespread consumers range from consumer line laptops (MacBook) and desktops to Apple TV, iPod, iPhone that are offered with up to 120 GB of storage and other user friendly features like web browsing, touch screen etc.
Apple has always believed in its R&D, innovation, and well-designed or top notch quality.
As far as the Positioning is concerned, Apple's target group has always been the richer class and the people that have good jobs and lifestyle.
With over 300 retail stores spread over more than 10 countries, along with an online store, Apple has increased its market share gradually.
Apple Inc. had close to 46,600 full time employees as on 25th September. With such a huge employee database, excellent development facilities and retail locations located worldwide, Apple Inc. stands as one of the pioneers of technology industry.
As per Fortune's list 2009 of the America's largest corporation, Apple Inc. ranks 71. (Source: http://money.cnn.com/magazines/fortune/fortune500/2009/snapshots/670.html)
As defined by Balanced Scorecard Institute, the balanced scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organisation, improve internal and external communications, and monitor organisational performance against strategic goals. (Source: http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx)
Most of the organisations use the balanced scorecard to bring upon changes effectively in the organisation. However, as far as APPLE INC. is concerned it doesn't use the scorecard to drive the operating changes but uses it as a device to plan long term performance. Apple is concerned of expanding the discussions beyond the profits, return on equity and other such financial variables.
From within the four perspectives, Apple's Executive Management Team decided to focus on multiple measurement categories in the following order
Financial Perspective - Shareholder Value
Although Shareholder value is a result and not a driver of performance, but still Apple counted it as a performance indicator as far as the financial perspective is concerned. Usually the emphasis is laid on increasing the sales volume and the margin of profit, but these measures tend to ignore the impact of investments that are required today in order to get future growth. In such conditions, shareholder Value is used as an offsetting measure because it quantifies the impact of proposed investments for business creation and development.
Customer Perspective - Market share and customer satisfaction
A few years back Apple was primarily concerned with its superior technology and competing strongly by manufacturing better designed computers. The measure of customer satisfaction was introduced only to orient the employees for becoming a customer driven company.
For instance, J.D. Power &. Associates, a customer-survey -company has a great name in computer industry, but since the customer base of Apple is not homogeneous, so it decided to start conducting its own surveys to track its market segments around the globe. This shows the extent at which they are ready to go to achieve highest level of customer satisfaction.
They also lay down a great deal of emphasis on attracting and retaining a huge market share, not only for achieving sales growth but also to retain the software developers to Apple platforms.
Internal Process Perspective - Core Competencies
The company executives were earlier concerned with some key competencies for the internal processes that they expected their employees to follow, such as user friendly interfaces, efficient distribution system etc. But later on they realised that it was really tough to measure the performance along these dimensions. Hence, now they are experimenting to obtain the quantitative measures for these competencies.
The Innovation and Improvement Perspective - Employee Attitude
An employee survey is conducted every two years by Apple in each of its organisation, concerning the issues such as how well the employee understands the company's strategies, and whether their efforts are consistent with those strategies. The surveys of randomly selected employees are even done more frequently. They display the results in terms of the actual level of employee responses and also in terms of the overall trend of responses.
Well, the reason why I chose Apple for my assignment was because of one man: Steve Jobs. Before starting off with my assignment I used to consider Steve Jobs as an idol. Especially when I read in an article a few years back that Apple's crisis called Steve back in the organisation and he simply turned around the things and took the company at the top, I really got fascinated by this man. Not only me but his style of leadership sets example for everyone. Undoubtedly, there is no better role model for today's youth which considers itself as future visionary and transformational leaders. His successful leadership could be seen when Apple's share prices fell by 2 percent just because of a rumour that Steve jobs was ill. (Reuters, 2008)
Going a few years back, Apple was in crisis.
Due to some internal power struggles, Steve was forced to leave the company in 1985.
The next 10 years, Apple saw nightmares. The financial losses kept on mounting reaching $816 million in 1996 and $1 billion in 1997.
The company's stock which was once trading at $70 per share in 1991 fell down to $14 per share.
Fortune Magazine in its 1997 March 3 issue, described Apple as "Silicon Valley's paragon of dysfunctional management." (Woods, 1997).
After this, Steve Jobs was appointed as the CEO of the company and things started changing. We all know the result today. Apple ranks 6th in the Forbes' most reputable companies list, much ahead of its rivals Microsoft, HP, Dell etc. (Forbes, 2010)
Despite of all his achievements and his efforts in taking Apple to such a position where the competitors find hard to even reach close to its results, Jobs has been surrounded with controversies.
As far as the Apple products are concerned, Steve Jobs is looked up as an idol in the business. However, as far as his leadership approach is concerned, things go dicey.
Transformational Leader........But lacking in individual consideration
There are four key qualities in an effective transformational leadership: charisma/idealised influence, inspirational motivation, intellectual stimulation and individual consideration. (Bass, 1998)
As the meaning of this style of leadership suggests, Steve Jobs is known to be possessed with all the qualities to act as a strong transformational leader except one i.e. individual consideration.
Job has got a phenomenal hunger for achieving perfection. He has acted as a one man army and has totally revolutionised our way of computing, watching videos and listening to music. His unusual mix of hot temper and cool temperament can be felt in his products like iPods, iMac etc. (Vroom, Yale School of Management, 2005)
His greatness can be seen from his past as well as from the company's past. He took hold of the company when it was running in losses and has taken it to the top position. The Apple products today enhance the society's digital image.
Not only that, during his absence from Apple for about 12 years (1985-1997), he also successfully transformed 'Pixar' into a successful venture. (Young, J.S. & Simon, W.L., 2005)
However the reasons why I feel that he lacks in human element are:
While Apple is known to build trust with its stakeholders, at the same time, Jobs himself admits that Apple likes secrecy. They believe on speaking about something that they have achieved and not about something that they are going to. It is good to maintain a certain level of secrecy but doesn't this hamper the individual consideration of the stakeholders of Apple when they themselves don't know what their company is going to come up with.
Steve Jobs himself claims that his job is not to be easy on his employees. He only has to pull things out of various departments in order to ensure efficiency and effectiveness in the operations. My viewpoint in this regard is that if the employees are always scared of their boss then how they can perform up to their abilities. I doubt whether this affects the individual consideration of employees. (Fortune, 2008)
William C. Taylor, in his Harvard Business Review, 2009, claims that the arrogant attitude of Steve and his top-down approach is unworkable. He also said that no CEO should possess qualities like these. Moreover, in this ever changing business environment, his model of executive power is unsustainable and ineffective.
According to an article in wired tech magazine, 2008, Steve Jobs has been found very often parking his Mercedes car at the space which is ideally meant for disabled. Whether it is good or bad, but his attitude shows that he is not bothered by rules.
Charismatic Leaderâ€¦â€¦â€¦.or a Personalised Leader
With an excellent ability to give speeches and captivate the audience and the employees, this man is known to be a strong charismatic leader. His innovative ability can also be seen in his speeches. While giving the speech for iPad, he sat down on a couch and created a scene of a person spending his holiday, reading newspaper. He opened the WebPages of American newspaper and this way he explained the benefits of the iPad.
His charismatic qualities enable him to make his employees more enthusiastic and the customers more convinced to buy.
However, I feel that if he is such a good charismatic leader and has tremendous influencing skills, then why he is many times been characterised as manipulative, rude and dishonest. He is also considered as very rude and authoritative in the meetings by his employees. Also, he is known to get his work done not only by motivating story telling but also by force. (Young, J.S. & Simon, W.L., 2005)
According to Steve Jobs, his job is to make his employees better and not to be easy on them. He has to make sure that all the ways in the company are clear and things are carefully pulled out of all the departments in order to get the appropriate resources for the projects. Because of his domineering presence, the employees are at times scared of him. No doubt, this shows his quest for perfection. But this also, to some extent, shows that his Individual Consideration Level is quite low. Else, the employees wouldn't have been scared if they knew their boss respected their emotions.
Vault, a New York based research firm conducted a survey on Apple employees on four major areas: Workplace, Interview and Recruitment, Salary and compensation, Business outlook. The results of the research showed that employees were less satisfied with the compensation, bonuses and it was also observed that they find it tough to climb the corporate ladder (Gitman & McDaniel, 2008). However, the report also suggested that the employees otherwise had a full passion towards the company policies and the products.
My point of view in this regard is that if the employees are not satisfied with their pays and bonuses nor are they obtaining sufficient freedom to express their opinion in meetings, then how they can show a full passion in their work.
Max Weber's (1947) Model of Transaction and Transformation Leadership Authority
THREE FRAMES FOR THE Capitalist Entrepreneur
2. Bureaucratic (Transactional)
Bureaucracy is "the exercise of control on the basis of knowledge. It is the stuff of rational legal hierarchical power, the Bureaucratic leader.
1. Charismatic/ Hero (Transformer)
An individual personality set apart form ordinary people and endowed with supernatural, superman powers, and heroic Charismatic leadership qualities. In short part Hero, and part Superman/ Superwoman.
3. Traditional (Feudal/ Prince)
Traditional is an arbitrary exercise of Sultan power bound to loyalty, favouritism, and politics. It is stuff of Princely leadership.
According to the analysis above, I feel that apple Inc. lies in the 3rd Quadrant of Max Weber's (1947) model of Transaction and Transformation Leadership Authority i.e. Apple is outperforming the others in the market primarily because of the tremendous charismatic qualities of Steve Jobs.
So although Weber's definition of charisma applies to Jobs but at the same time Bass's parameter of individual consideration does not apply to him. This increases my doubts whether he is actually a charismatic leader or more of a personalised leader.
Motivation refers to the psychological process that gives behaviour purpose and direction (Kreitner, 1995). The motivated employees tend to be more effective and productive for the organisation. Thus it is very essential for managers to identify the needs and requirements of the employees and then go on to satisfy them. However the task of motivating employees is very complex mainly because of the fact that what motivates them keeps on changing (Bowen & Radhakrishna, 1991)
The results of Glassdoor, 2010, clearly show that the employees of Apple are motivated and have full respect for their boss.
By understanding the importance of motivating employees and also by looking at Apple's past year's results I felt that Steve Jobs has been outstanding as far as getting the commitment of employees is concerned.
However, when I read the following two statements made by Steve Jobs at different points of time, I was in doubt and this made me go deeper and find out whether the employees are actually motivated enough and whether the tremendous results of Apple are outcomes of employee's commitment.
In an interview with Inc Magazine in 1989, Steve Jobs said that if the employees know that they are working in such an environment where nothing less than excellence is expected out of them, then they need not be told anything. Rather they are self motivated to give their best. All that needs to be done in such a case is just to coach them initially and then they will always come up with outstanding results. (Gendron, 1989)
Steve Jobs says that his job is not to be easy on his people but to pull things from different parts of the organisation and use them efficiently for key projects. He believes that he needs to push people to make them better to convince them for some aggressive visions. (Fortune, 2008)
To get a clear thought, I studied the Maslow's hierarchy of needs (1943), a model of motivation that has got a lot of attention. It says that the needs can be classified into following stages, with the last need being the most basic need.
(Doing what best you can do)
(Self-respect and respect from others)
(Acceptance and being part of something)
(Physical and Psychological security)
(Hunger, Thirst, Rest etc.)
The reason why I have left 'Esteem' , 'Belonging' and 'Self Actualisation needs' as highlighted is that according to me, these are the shortfalls in the motivation level of the employees of Apple Inc.
The motivation of employees has never been a strong point of Apple. Even the employees of Apple do not know what their company is coming up with next. The workers are provided with electronic badges that deny them access to certain places in the campus. Not only that, Jobs makes sure that the software and the hardware teams are both separated and placed in different buildings so that no one has a clear idea of what the company is up to. Just like terrorists, Apple employees have got their cells. (Rubinstein, former head of Apple's hardware, 2010). I wonder as to, doesn't this hamper the 'Belonging Stage' of Maslow's hierarchy of needs?
Jobs is known to be a notorious manager. He looks for total perfection right from the number of screws used at the bottom of laptop (Ratzlaff, former manager charged with creating OS X interface, 2008). Well that is not wrong. In fact that is great. But the problem is that in order to achieve this perfection, where most of the managers would have preferred to motivate the employees by carrots, Jobs uses his stick. And that goes true even for his most favoured employees (Eigerman, former Apple engineer, 2008). Doesn't this hamper the 'Esteem needs Stage' of Maslow's hierarchy?
Not only this, the secrecy level in Apple is still quite high. The famous case of the employee that was fired just because he showed the iPad one night before its launch to Steve Wozniak throws some light on the aspect. At that time, even Wozniak tried to convince Jobs that the employee had no bad intentions in showing the product, but Jobs was not ready to listen. (Yarrow, 2010)
In my opinion it is good to maintain the product secrecy but then why did they let go Gray Powell, Apple engineer who lost the, so called, prototype of iPhone4G.
Moreover, if we go into the theory of innovation, it is quite clear that innovative products come out of employees' involvement. But at the same time, Jobs is known to be an autocratic leader and he wants the people to listen to him no matter what happens. So I cannot confidently say that the innovation at Apple is an outcome of employees' involvement. Rather I believe that it hampers the 'Self Actualisation Stage' of Maslow's hierarchy.
However, unlike the traditional writers on Motivation, if we look into what Roderick Kramer wrote in 2006 for Harvard Business Review, a certain degree of forcefulness might prove to be useful when it comes to handling intractable problems. This thought means that Steve Jobs has his own way of doing things and since he has always delivered results so one might believe his ways to be the right ways. But my question is that whether it is all about Steve jobs or it is more importantly about Apple Inc. If the latter case is true then according to me, Jobs' way is not the right way.
An insider once told that Steve is very critical with his employees and also makes them cry often. But he also added that most of the times he was right. (Robert Sutton, 2007). Sutton in his book in 2007, 'No Asshole Rule' also mentioned that Jobs is an exception to his viewpoint against the workplace tyrants. Steve Jobs has proved that there is nothing wrong in being an Asshole (Guy Kawasaki, Apple's former chief evangelist, 2008)
Although some people feel that the Apple's approach has been critical and has proved to be an exception in achieving success. But I would like to question them that if the employees are not fully satisfied today, will the things remain same in future?
Change constitutes an important aspect of organisation's development. It is basically referred to as a " a set of behavioural science-based theories, values, strategies, and techniques aimed at the planned change of organisational work setting for the purpose of enhancing individual development and improving organisational performance, through the alteration of organisational members' on the job behaviours" (Porras & Robertson, 1992).
"Change has never been described as an easy job. Many leaders not only fail in making operating changes but at times also fail in making critical changes in the way the organisations are led" (W Pasmore, 2010).
Unlike many other big companies, Apple seems to have successfully gained mastery in this matter. Every now and then they come up with new technology and smart innovative products. The financial figures prove that all the changes implemented by them have not only been widely accepted by employees and customers, but have also achieved commendable responses. Whether it's a slim MacBook or it's a new tablet, their new concepts have been able to build a strong database of followers and users. There are many reasons behind Steve's successful change management, out of which the most spectacular is his ability to understand and anticipate the customer wants (Carmine Gallo, 2010)
Treating Employees as Focus Group: Change Management is an ability of the management to take the individuals and the organisation from the current level to the future desired level i.e. the next level. Jobs doesn't rely on focus groups, instead he is a firm believer of the fact that the customers themselves don't know what they want. He has a strong understanding ability and can anticipate his customers' demand without asking them. So he treats his own employees as focus group and makes the decision without any customer intervention. By giving such huge importance to the employees, the employees themselves feel a part of the change. Thus he gains the employee loyalty very easily. The products like iPod, iPhone, and iTunes are great examples that prove his expertise in understanding the customer needs.
Choosing Employees with Multiple Factor of Excellence: Every individual thinks differently and has got different perceptions and attitude in life. So it is practically impossible to achieve 100% approval from all the employees. Rather, they need to be motivated and inspired enough to accept and adapt to change.
When Jobs chooses members for his team, he always looks for multiplier factor of excellence. He believes that the extraordinary designers, engineers and managers are not only better than the good ones by 10 or 20 percent, but 10 times better. Jobs feels that their contribution acts as raw materials in making a truly outstanding product (Steve Lohr, 2010).
Eliminating Fear of Change: As per the report of CCL (Centre for Creative Leadership), there are gaps in the skill base for leaders to organise effectively the change management, particularly in countries like India, U.S. and China. This key gap is the gap of fear. (Mind Resources Inst. of Learning & Innovation, n.d.)
Over a period of time, Steve Jobs and his visionary leadership has made "change" the mantra of the organisation, including its distribution and channel partners (Mind Resources Inst. of Learning & Innovation, n.d.).
During the iTunes launch, after a complete presentation to the dealers and the staff, the last thing that was there on peoples 'mind was fear that it might result in changing the entire industry (Mind Resources Inst. of Learning & Innovation). Jobs, using his spectacular charismatic ability made sure that the fear of change was removed from people's mind, without which it was practically impossible to achieve their 100% contribution. This actually happened. iTunes made a revolution in the music industry.
Managing Changes in Distribution Strategy: It is expected, at times, that innovation might just disrupt the entire distribution strategy. This problem was faced by Apple at the time of launching iPod. Before entering the consumer electronics industry, they made sure that they built good relations with big box stores like Wal Mart, Target etc. By introducing iTunes, they were also successful in building a complete new distribution strategy for distributing digital music. Thus apple was able to overcome the problems of changes in distribution strategy.
As a result the consumers have witnessed a total transformation in the computing world.
CONCLUSION AND RECOMMENDATIONS
By looking at the financial results of Apple Incorporated, people might perceive that things are going quite well within the organisation. But the entire analysis above shows that there are a lot of loopholes in Apple's functioning which requires a deep thought. Where Steve Jobs is considered as an idol by millions of people, at the same time his attitude questions whether he is a true transformational leader or more of a personalised leader. One might feel that innovative products of Apple are a result of employee motivation and involvement. But that is not the case. By analysing the levels of motivation with the help of Maslow's Hierarchy of Needs, it was found that the top three levels of needs go dicey in case of Apple employees. However, there is no denying the fact that Apple has mastered in the concept of change. Whether it is about training the employees for change or it is about managing the changes in distribution strategy, Apple has successfully managed changes both within as well as outside the organisation.
My recommendations to the company, particularly to Steve Jobs, are:
No wonder apple has no match in its innovation. But things can further improve provided that employees are given more freedom to express their thoughts. Moreover, if instead of Stick, Jobs can manage with some positive motivation, it can do wonders for the company as far as employee loyalty is concerned.
Steve Jobs, undoubtedly, is a fantastic charismatic leader. The analysis in the report clearly shows that the charisma of Steve Jobs has single handed taken the company to such heights. But Apple needs to think beyond Steve Jobs. The company should start focussing more on its future, for which it is really important that the other members of the organisation also start scratching their heads and reduce their dependency on one man.